European stocks edged lower with U.S. equity futures as investors weighed a potential setback on progress toward a coronavirus vaccine ahead of a busy period for corporate earnings. The dollar and Treasuries advanced.
S&P 500 contracts fell as much as 0.6% after a report that Johnson & Johnson’s Covid-19 vaccine study has been paused due to an unexplained illness in a participant. In Europe, travel and leisure shares slumped. Stocks were little changed in South Korea and China, where economic data pointed to further recovery for global trade and a robust domestic rebound. Hong Kong scrapped its trading session as a tropical storm neared.
Oil fluctuated after slumping with workers in the U.S. Gulf heading back following Hurricane Delta’s landfall and Libya taking a major step toward reopening its biggest field.
Markets are pausing for breath a day after the Nasdaq 100 surged to the biggest advance since April, powered by technology leaders including Amazon.com Inc., Apple Inc. and Twitter Inc. Amazon is gearing up for its Prime Day bonanza, and Apple for its event where it’s expected to unveil 5G as one of its most significant additions to this year’s iPhones. Earnings season also gets underway, with JPMorgan Chase & Co. and Citigroup Inc. reporting.
Meanwhile, prospects for a quick end to the stimulus stalemate in the U.S. may be fading with members of the House being told not to expect any action this week and many Senate Republicans rejecting the White House proposal for a deal. On the virus front, the Johnson & Johnson study halt was yet another sign that the race for a Covid-19 vaccine is bumpy.
“The hurdles at the moment come from the uncertainty around the U.S. election and the uncertainty about the timing and effectiveness of a vaccine,” Chris Iggo, Chief Investment Officer, AXA IM Core Investments.
The hearings for the Supreme Court nomination of Judge Amy Coney Barrett continue in the Senate Judiciary Committee as Republicans try to cement a conservative majority on the court before the Nov. 3 election.
Here are some key events coming up
- JPMorgan, Citigroup and BlackRock report earnings on Tuesday; results from Wells Fargo, Bank of America and Goldman Sachs are due Wednesday; Morgan Stanley’s earnings are scheduled for Thursday.
- U.K. Prime Minister Boris Johnson set a deadline of Thursday to thrash out the outline of a European Union trade deal.
- European Central Bank President Christine Lagarde leads off the virtual annual meetings of the International Monetary Fund and the World Bank Group. Through Oct. 18.
These are some of the main moves in markets:
Stocks
- Futures on the S&P 500 Index fell 0.6% as of 8:28 a.m. London time.
- The Stoxx Europe 600 Index sank 0.4%.
- The MSCI Asia Pacific Index increased 0.1%.
- The MSCI Emerging Market Index decreased 0.1%.
Currencies
- The Bloomberg Dollar Spot Index rose 0.2%.
- The euro fell 0.3% to $1.1783.
- The British pound sank 0.3% to $1.3029.
- The onshore yuan was little changed at 6.744 per dollar.
- The Japanese yen weakened 0.1% to 105.44 per dollar.
Bonds
- The yield on 10-year Treasuries fell two basis points to 0.75%.
- The yield on two-year Treasuries decreased one basis point to 0.15%.
- Germany’s 10-year yield declined one basis point to -0.55%.
- Britain’s 10-year yield fell one basis point to 0.26%.
- Japan’s 10-year yield decreased less than one basis point to 0.03%.
Commodities
- West Texas Intermediate crude was little changed at $39.44 a barrel.
- Brent crude was little changed at $41.74 a barrel.
- Gold weakened 0.2% to $1,918.46 an ounce.